special state report - biennial budget bill

Enacted Version

After extensive conference committee negotiations, both the House and the Senate passed a biennial budget conference committee report during the early hours of April 27. This report summarizes provisions included in the enacted budget of interest to Indiana University.

Operating Appropriations

The enacted budget distributes operating appropriations through a higher education performance funding formula using a combination of new state dollars and reallocation of existing university state operating appropriations.

The level of performance funding proposed is increased from the current biennium level of 5% of total university operating appropriations to 6.0% for both years of the upcoming biennium (FY 2014 and FY 2015). Performance funding totals nearly $67 million in both FY 2014 and FY 2015.

The final budget appropriates $42.2 million in new state funds towards the performance funding formula in FY 2014 (3.5% increase over the FY 2013 operating appropriation base) and continues this level in FY 2015.

63% of performance funding in both FY 2014 and FY 2015 is to be from new state dollars and 37% from reallocated university operating appropriations.

As shown on the attachment, results vary for individual IU campuses based on how they perform on the various performance funding metrics, but for FY 2014, operating appropriation increases range from 7.9% at the East campus to 0.6% at the Southeast campus. For the IU system, the increase is 3.6% in FY 2014. As with the House budget, the Schools of Medicine and Dentistry are excluded from the performance funding formula but we were successful in securing a 3.5% increase in the Schools’ appropriation in FY 2014 above the FY 2013 level.

IU has eleven line item appropriations and most were appropriated at FY 2013 levels for the biennium except the Geological Survey and Spinal Cord and Head Injury programs would receive a 3.5% increase in FY 2014. In addition funding for the Indiana Advisory Commission on Intergovernmental Relations, housed within SPEA at IUPUI, was increased from $48,062 to $150,000.

The budget bill includes a new separate appropriation to each institution for funding priority dual credit courses offered in high schools at a level of $50 per credit. For the Indiana University system the total is $1.45 million per year.

The budget includes language stating that the Indiana Economic Development Corporation (IEDC) shall allocate $2.5 million annually of its 21st Century Research and Technology Fund appropriation to Indiana University to support research activities that may have an economic impact to the state.

Finally, the budget includes a $25 million biennial appropriation to the IEDC for the Indiana Biosciences Research Institute, which has been proposed by Governor Pence.

Capital Project Authorizations

Capital projects included in the enacted budget include the following projects funded with cash appropriations rather than the typical bonding authority:

Regional Campus Repair and Rehabilitation: $29 million

IU School of Medicine Laboratory Building Expansion: $25 million

Evansville Medical Education Center A&E: $2 million

In addition, debt service appropriations were provided for two projects that were authorized in previous budgets but have not yet been reviewed and approved by the state:

IU Northwest Tamarack Hall Replacement, now a joint project with Ivy Tech: $45 million total cost

IU Bloomington Academic Core Renovation: $21 million total cost

R&R Funding

For state repair and rehabilitation funding, the bill includes an appropriation of nearly $23 million for the biennium as recommended by ICHE.

Other Provisions

The bill includes language that authorizes universities to monetize certain assets through lease agreements. IU sought the language in the event the IU Trustees decide to pursue a lease of parking facilities, as is currently under consideration